On a recent episode of We Study Billionaires (TIP813), host Trey Lockerbie laid out a bull case for Microsoft (NASDAQ:MSFT | MSFT Price Prediction)’s GitHub acquisition. Lockerbie called it “maybe one of the best technology acquisitions of the last decade,” arguing that “$7.5 billion for the world’s most dominant coding platform” had become the primary channel through which Microsoft acquires developers who make cloud decisions. That framing now looks prescient.
Microsoft announced the GitHub deal in June 2018 and closed it that October for $7.5 billion in stock. Since closing, MSFT shares have returned roughly 340% through the original publication of this article in May 2026, and the company’s market cap sits near $3 trillion. The acquisition price has become a rounding error against Microsoft’s overall scale.
The GitHub Flywheel Is Showing Up in the Numbers
On the Q3 FY2026 earnings call, CEO Satya Nadella made the developer story central to the investment thesis. “GitHub itself is seeing unprecedented growth driven by the proliferation of agentic coding, and we are hard at work to scale and meet this demand,” he told analysts. He disclosed that nearly 140,000 organizations now use GitHub Copilot in Enterprise, a figure that nearly tripled year over year, while GitHub Copilot CLI usage is nearly doubling month over month.
The financials behind those disclosures are equally striking. Microsoft reported Q3 FY26 revenue of $82.89 billion, up 18% year over year, with EPS of $4.27 against a $4.06 consensus estimate. The AI business surpassed an annual revenue run rate of $37 billion, up 123% year over year, while commercial remaining performance obligations hit $627 billion, up 99%. Full results are in the Q3 FY26 8-K.
Why Lockerbie and Brodersen See an Underrated Deal
The podcast hosts focused on three reinforcing dynamics that turn GitHub into a compounding asset for Microsoft rather than a standalone business.
Scale: GitHub now hosts more than 180 million developers, up from the 28 million the platform counted when Microsoft acquired it in 2018. That audience grew 80% in the two years since the platform crossed 100 million users in early 2023, driven in part by the launch of a free Copilot tier in late 2024.
Productivity: Per co-host Stig Brodersen, GitHub Copilot lets developers write code “20 to 30 times faster in ways that show up directly in the shipping times for future products.” That speed advantage gives organizations a concrete business case for keeping their workflow inside the GitHub ecosystem.
Distribution: Brodersen noted that when “a developer’s entire workflow is on GitHub and Visual Studio, I think the path of least resistance” is “deploying in Azure.” That gravitational pull shows up in cloud results. Azure grew 40% in Q3, and Lockerbie pointed to a $344 billion backlog with non-OpenAI committed revenue growing 28%, adding that the backlog “doesn’t look like a dying company.”
What to Watch Next
Two developments have moved from forecast to fact since this article first published. GitHub Copilot’s shift to usage-based billing went live on June 1, 2026, replacing the premium request unit model with GitHub AI Credits billed at token consumption rates. The transition prompted pushback from developers who rely on agentic and chat-heavy workflows, since those sessions consume credits far faster than standard inline completions. CFO Amy Hood had flagged the change as a near-term margin headwind with longer-term revenue upside, and the actual rollout confirmed that tension.
The next major inflection point is Microsoft’s Q4 FY2026 earnings report, scheduled for July 29, 2026. Hood’s guidance called for revenue of $86.7 billion to $87.8 billion in the quarter, with Azure growth of 39% to 40% in constant currency. Analyst consensus targets for the stock cluster near $562, supported by 51 Buy ratings, three Hold ratings, and zero Sell ratings from Wall Street analysts. The gap between that consensus view and the stock’s recent trading range reflects the broader debate over how quickly the developer flywheel translates into durable margin expansion.
Editor’s note: This article was updated to reflect that GitHub’s developer base has grown to more than 180 million as of the Octoverse 2025 report, that GitHub Copilot’s usage-based billing launched on June 1, 2026 replacing premium request units with AI Credits, and that the analyst consensus price target has edged up to approximately $562 with Microsoft’s Q4 FY2026 results due July 29, 2026.
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